HUD issued a proposed rule on November 16 to establish uniform standards for determining when a housing practice with a discriminatory effect violates the Fair Housing Act. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968, prohibits discrimination on the basis of race, color, religion, sex, disability, national origin, or familial status (the “protected classes”) in the sale, rental, or financing of dwellings and in other housing-related activities.
For many years, HUD has interpreted the Fair Housing Act to prohibit housing practices that have a discriminatory effect, even if there has been no intent to discriminate. Eleven U.S. Courts of Appeals have agreed. However, there have been minor variations in how the Courts and HUD have applied the discriminatory effects concept.
The Fair Housing Act regulations (24 CFR part 100) would be amended to add a new subpart G, standardizing a three-step “burden-shifting” approach HUD has always used and that a majority of Appeals Courts have used.
- First, the party complaining there is a discriminatory effect has the burden of proving that a housing practice caused, causes, or will cause a discriminatory effect.
- Second, if the complaining party makes a convincing argument, the burden of proof shifts to the defending party which must show that, having has a “legally sufficient justification,” the housing practice is necessary for legitimate, nondiscriminatory reasons.
- Third, if the defending party is successful, the complaining party can still succeed by demonstrating that the defending party’s legitimate, nondiscriminatory interests could be served in ways that have a less discriminatory effect.
The term “discriminatory effect” would be defined as a housing practice that actually or predictably results in a “disparate impact” on a group of people in one of the protected classes, or that has an effect on the community as a whole by creating, perpetuating, or increasing housing segregation.
A number of examples of “disparate impact” and “perpetuating segregation” are listed in the background section of the proposed rule. Each is based on court decisions. Examples include: zoning ordinances that restrict construction of multifamily housing to predominantly minority areas, public housing agency use of a local residency preference for distributing Housing Choice Vouchers where most residents are white, and demolition of public housing principally occupied by African-Americans.
Comments are due January 17, 2012. The proposed rule is at http://www.gpo.gov/fdsys/pkg/FR-2011-11-16/pdf/2011-29515.pdf